AUD/PKR Outlook:
The outlook for AUD/PKR is likely to increase as the rate is above its recent average and near recent highs, driven by supportive economic factors.
Key drivers:
• Rate gap: The Reserve Bank of Australia's recent rate hike contrasts with the pressures on the Pakistani economy, widening the interest rate differential and favoring the AUD.
• Risk/commodities: Higher demand for Australian exports, particularly in commodities like iron ore, supports the AUD as global markets show more optimism.
• One macro factor: The improved consumer price index in Australia indicates persistent inflation, which could lead to more interest rate hikes from the RBA.
Range:
AUD/PKR is likely to hold near recent highs after a period of volatility, potentially testing the upper extremes of its 3-month range.
What could change it:
• Upside risk: A significant increase in Australian commodity prices could further boost the AUD.
• Downside risk: Escalating geopolitical tensions in Pakistan could pressure the PKR, leading to potential volatility in the exchange rate.
